New Delhi: The cabinet on Thursday approved a proposal to enact a new law to strictly deal with benami transactions or property purchased in someone else's name.
The cabinet, at a meeting chaired by Prime Minister Manmohan Singh approved the tabling in Parliament of the Benami Transactions (Prohibition) Bill, 2011 to replace the Benami Transactions (Prohibition) Act of 1988.
"The Bill contains elaborate provisions dealing with the definition of benami transaction and benami property, prohibited benami transactions, consequences of entering into a prohibited benami transaction and the procedure for implementing the benami law," a statement released after the meeting said.
Properties held by a coparcener in a Hindu undivided family and property held by a person in fiduciary capacity are excluded from the definition of benami transaction.
A coparcener is an individual who holds property inherited from an ancestor, while a fiduciary is an individual who holds property in trust.
Further, properties acquired by an individual in the name of spouse, brother or sister or any lineal ascendant or descendant are benami transactions which are not prohibited. Consequently, they are not subject to penal provisions.
Broadly speaking, if the real beneficiary of a property is not the person in whose name it is bought, such transactions are termed as benami, a Persian word meaning without name.
Benami transactions are the major source of black money. The government is under intense pressure to deal strictly with such transactions.
According to the proposed Bill, if "any person enters into a benami transaction in order to defeat the provisions of any law or to avoid payment of statutory dues or to avoid payment to creditors, the beneficial owner, benamidar and any other person who abets or induces any person to enter into such benami transaction, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to two years and shall also be liable to a fine".
"A benami property shall also be liable for confiscation by the Adjudicating Authority after the person concerned has been given due opportunity of being heard," the statement said, reports IANS.
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